Argentina retaliated against Bank of New York Mellon on Monday for refusing to make payments to bondholders in compliance with a US court ruling – a move which has also led a group of hedge funds that includes George Soros’ Quantum Partners to sue the US bank, the Financial Times reported. The move by Buenos Aires, which cancels the banking licences of two local bank officials, follows a proposal sent to congress last week by President Cristina Fernández that aims to replace BNY Mellon as its trustee with a local state-run bank.

Argentina's default three weeks ago, and the ongoing legal battle that led up to it, raises practical, theoretical, and moral questions about the ad hoc process that ensues when a country doesn't repay its creditors, Foreign Policy reported. "We're at a moment where a lot of people have been stopped short and are asking: Is this really the way we want restructurings to go forward?" asked Mark Weidemaier, a sovereign-bond expert at the University of North Carolina at Chapel Hill.

When President Cristina Fernández confidently praised Argentina’s financial system as “one of the most solid in the world” during a speech at the Buenos Aires stock exchange on Wednesday, some of the high-ranking executives present struggled to hide their incredulity, the Financial Times reported. Just the day before, at one point on the verge of tears, Argentina’s mercurial leader had nervously announced a plan to dodge a US court order to pay so-called “holdout” creditors in New York, after the ruling pushed the country into default last month for the second time in 13 years.

A federal court judge said on Thursday that Argentina’s attempt to skirt one of his rulings was “lawless” but stopped short of finding the country in contempt of court, the International New York Times reported. Exasperated lawyers for a group of New York hedge funds that are seeking more than $1.5 billion in bond payments that Argentina has refused to pay pleaded with the judge to take a harsher stance. In a heated moment, one of the lawyers, Robert A.

The Brazilian government on Wednesday announced measures aimed at increasing bank lending, including granting banks permission to issue home-equity loans, The Wall Street Journal reported. The measures also include reducing documentation for mortgages and streamlining the process to seize loan collateral. "Credit supply is running very low. The new measures will create conditions for the banks to offer more loans," Finance Minister Guido Mantega told reporters after the announcement.

Argentina will send a bill to Congress to authorize the payment of foreign debt in local accounts in a bid to skirt a U.S. court ruling that is blocking payments and caused the nation to default on July 30, Bloomberg News reported. Argentina will seek to remove trustee Bank of New York Mellon Corp. and deposit funds for foreign bondholders at an account at the central bank, President Cristina Fernandez de Kirchner said in a nationwide address.

Argentina's unemployment rate rose to 7.5% in the second quarter as the country's recession appeared to worsen and more companies laid off workers, The Wall Street Journal reported. The jobless rate, published by the government on Tuesday, is up from 7.1% in the first quarter and 7.2% a year earlier. Economists expect the unemployment rate to rise further this year as the recession worsens and more people find it harder to find jobs.

Argentina came out swinging today against the US judge overseeing its debt default case, in defiance of a threatened contempt order, and disappointed market hopes it might soon restart talks with the hedge funds suing the country, the Irish Times reported. A group of holdout investors have sued the South American country for full repayment on bonds that went into default in 2002. The funds rejected debt restructurings in 2005 and 2010, holding out for better terms.

Brazil's Oleo e Gas Participacoes SA, the bankrupt oil company controlled by Eike Batista, said yesterday that Brazilian buyout firm Cambuhy Investimentos bought shares worth 199.9 million reais ($87 million) that it held in Parnaíba Gás Natural, formerly known as OGX Maranhão, Reuters reported yesterday. The 245,728,660 shares were auctioned on Wednesday, the company said in a securities filing. Parnaíba was separated from OGX in October in an operation that generated 344 million reais, which was crucial for the survival of Batista's oil company.

Argentina has filed suit against the U.S. at the International Court of Justice in a high-stakes debt dispute between the South American nation and some of its creditors, the Wall Street Journal reported today. Argentina's lawsuit contends that decisions by U.S. courts in the dispute have violated its sovereignty, The Hague-based court said today. Argentina defaulted on some of its restructured debt July 30 after marathon talks with hedge funds suing to collect on bonds the country stopped paying in 2001 ended without a deal.